In a troubling finding in contrast to those worried they are not saving enough, the survey found that three in 10 American adults have not started saving for retirement and some are wholly underprepared. In what is a reasonable cause for worry, 68 percent of those ages 45-54 and half of those aged 55-64 have less than $100,000 in retirement savings.
The increased anxiety could be attributed to uncertainty among survey participants. It is common knowledge that the Social Security system, along with the politics that impact it, are very much up-in-the-air. As politicians from varying camps spew rhetoric about its insolvency or solvency and talk of raising the age for full benefits is never too far out of ear shot, it is no surprise that 47 percent of respondents do not know with a high degree of certainty how much of their current income will be replaced by Social Security.
However, it is not just Social Security that survey participants were unsure about:
- 44 percent said they were unsure of the mix of their overall retirement plan with many not knowing how much their employer-sponsored defined contribution plan would play a role; and
- 62 percent not knowing how much of their own personal savings they will have to devote to retirement.
Respondents indicated that working with an advisor seems to help. Fifty-eight percent of respondents who have worked with an advisor to develop a written retirement plan said they are much more confident about how much of their income will be replaced by Social Security and 55 percent are confident about how much of their income will be replaced by an employer-sponsored retirement plan. Many however, will need to supplement the two with another retirement vehicle, such as an annuity or an individual retirement account.
“The findings reveal that the pressures of saving for retirement are felt much earlier than you might expect. Some people begin feeling the weight of affording retirement as early as 30 years before they reach that phase of their life. It is very telling that those who have never worked with a financial advisor are more than three times as likely to indicate a significant degree of stress and anxiety about their retirement savings as those who currently work with an advisor,” said Michael Doshier, vice president of Retirement Marketing for Franklin Templeton Investments.